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Reporting compliance under the Affordable Care Act (ACA) can be complex and challenging for employers. Ensuring that you correctly report employee healthcare coverage information to the IRS is crucial to avoid penalties and maintain compliance. Here are some top tips to help you navigate ACA reporting smoothly in 2021.

1. Understand ACA Reporting Requirements

Know the Basics

• Familiarize yourself with the ACA reporting forms: Forms 1094-B, 1095-B, 1094-C, and 1095-C.
• Understand the differences between the forms and which ones apply to your organization based on size and type of coverage offered.

Stay Updated

• Keep abreast of any changes or updates to ACA reporting requirements from the IRS.
• Ensure you are using the most current versions of the required forms and instructions.

2. Collect Accurate Employee Data

Verify Employee Information

• Ensure all employee information, including names, social security numbers, and addresses, is accurate and up to date.
• Regularly audit and verify employee data to minimize errors in reporting.

Track Health Coverage

• Maintain detailed records of employee health coverage throughout the year.
• Track changes in coverage status, such as new hires, terminations, and changes in coverage level.

3. Utilize ACA Reporting Software

Consider Automated Solutions

• Invest in ACA reporting software to streamline the reporting process and reduce the risk of errors.
• Look for software that offers features such as data validation, form generation, and electronic filing.

Ensure Compatibility

• Choose software that is compatible with your existing payroll and HR systems for seamless data integration.
• Verify that the software meets IRS requirements for ACA reporting.

4. Establish Internal Processes

Assign Responsibility

• Designate a team or individual within your organization to oversee ACA reporting compliance.
• Clarify roles and responsibilities for collecting, verifying, and submitting reporting data.

Implement Timelines

• Create a reporting timeline with key deadlines for data collection, verification, and submission.
• Allow sufficient time for data review and correction before the reporting deadline.

5. Conduct Regular Audits

Review Data Accuracy

• Regularly audit employee data to ensure accuracy and completeness.
• Address any discrepancies or errors promptly to prevent reporting inaccuracies.

Monitor Compliance

• Conduct internal audits to ensure ongoing compliance with ACA reporting requirements.
• Stay proactive in identifying and addressing any compliance issues before they escalate.

6. Seek Professional Assistance

Consult with Experts

• Consider working with ACA reporting specialists or consultants to ensure accuracy and compliance.
• Get expert guidance on complex reporting issues, such as coverage eligibility and reporting for variable hour employees.

Training and Education

• Provide training for HR and payroll staff on ACA reporting requirements and best practices.
• Stay informed about changes in ACA regulations through seminars, webinars, and other educational resources.

By following these top tips for smooth ACA reporting compliance in 2021, employers can navigate the complexities of reporting requirements with confidence and accuracy.